Credit enhancement, in the form of letters of credit, liquidity facilities, and financial guaranty insurance policies, is of crucial importance in a significant percentage of tax-exempt debt issues, allowing issuers and conduit borrowers to take advantage of cost savings due to higher credit ratings and lower interest rates. 

Our attorneys have represented leading domestic and international banks, bond insurers, and public pension funds, in hundreds of transactions involving the credit enhancement of billions of dollars of tax-exempt bonds.  We have the expertise to advise clients, whether credit enhancement providers, public agencies, or conduit borrowers such as private hospitals, schools and universities, on the uses, legal aspects and financing documentation of a variety of credit enhancement products. We have the expertise to advise clients, whether public agencies, credit enhancement providers, or conduit borrowers such as private hospitals, schools and universities, on the uses, legal aspects and financing documentation of a variety of credit enhancement products. 

We also have assisted investment banking clients in structuring transactions to take advantage of innovative techniques offered by credit enhancement providers, and have developed techniques combining a variety of products to address structural, timing, pricing and rating agency concerns. Hawkins regularly advises clients as to the legal status of credit enhancement products under federal and state securities laws, and as to applicable disclosure standards.

We are called upon by our clients to analyze complex security structures involving tax revenue, user fees, real estate security, lock box arrangements, and perfection of security interests in deposit accounts, securities and other personal property under Article 9 of the Uniform Commercial Code.

In the field of letters of credit our attorneys are familiar with the ISP 98, UCP 500, UCC Article 5 and other legal provisions governing letters of credit, and have the practical experience working with banks’ international departments to insure the smooth execution and delivery of the letter of credit at the closing of the transaction.
Our extensive experience counseling credit enhancement providers with respect to direct-pay, standby, and confirming letters of credit, as well as reimbursement agreements, standby bond purchase agreements, and credit agreements for commercial paper programs, allows us to provide expert counsel to our clients.

We also represent our clients in the ongoing administration and maintenance of credit facilities, including the extension, amendment, substitution and termination of credit facilities.

Our attorneys’ experience includes the following:

• Representation of both liquidity providers in the $316,785,000 aggregate principal amount of City of Los Angeles Wastewater System Subordinate Revenue Bonds, Variable Rate Refunding Series 2006.  These Bonds were divided into five series split between the two liquidity facility providers.
• Representation of the co-letter of credit providers, one a domestic bank and one a public pension fund, in the Oregon Health and Science University $91,400,000 Special Revenue Bonds (OHSU Medical Group Project), Series 2004A and $24,000,000 Special Revenue Bonds (OHSU Medical Group Project), Series 2004B, a complex transaction involving multiple layers of ownership and security interests, as well as ancillary participations to other banks.
• Representation of co-letter of credit providers in the aggregate $1 billion State of California Kindergarten-University Public Education Facilities Bonds, Series 2004A, a transaction that involved a consortium of multiple banks and participants.